CME to acquire Nymex group for $9.4 bn

NEW YORK: Chicago Mercantile (CME )Group, the world’s largest futures market is all set to acquire Nymex Holdings for $9.4 billion.

CME will give shareholders of Nymex (Newyork Mercantile Exchange), the biggest energy market, 0.1323 of its stock plus $36 in cash for each Nymex share they own.

The offer values Nymex at $100.30 a share, or 5.2% above Nymex’s March 14 closing price of $95.34.

Now CME will be able to add benchmark oil and natural gas futures to the contracts it offers.

The acquisition builds on a two-year partnership between the companies, in which Nymex’s contracts have traded on CME’s Globex electronic trading platform.

CME Group gains a stronghold in trading contracts that set prices on everything from oil and natural gas to US Treasuries. It will also acquire Nymex’s over-the-counter business, an area CME has struggled to penetrate in financial futures such as interest rates.

Analysts said there are good synergies between these two exchanges and that increase in volumes will boost profits for CME.

Exchanges have announced at least $41 billion of mergers and acquisitions since the start of last year, according to analysts.

NYSE Euronext, under the new leadership of Duncan Niederauer, agreed to buy the American Stock Exchange for $260 million in January.

Electronic trading at Nymex soared after it listed its contracts on Globex in 2006 in response to rival Intercontinental Exchange Inc’s introduction of a competing US crude oil futures contract that trades via computer. About 76% of Nymex’s contracts traded via computer last month, compared with 16% in February 2006.

Nymex shareholders can elect to take cash or stock for their shares in the deal, up to a maximum of $3.4 billion in cash.